Signed, Sealed, Sentenced

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hand holding American dollar currency isolated on blurred blackground injured woman with broken hand and green cast on arm, insurance health concept.

Today’s fraud story is about a New Jersey doctor who took advantage of hundreds of postal service employees so that his medical practice could prosper. Mark Filippone pleaded guilty in federal court via videoconference for conspiring to violate the federal anti-kickback statute. Filippone admitted to prescribing expensive pain creams to postal service employees, then steering them to a specific pharmacy to have them filled.

Filippone prescribed medically unnecessary compound pain creams to hundreds of postal service employees who were seeking treatment for work-related injuries. Note that compounded pain creams must be specially mixed by pharmacists and are only meant to be prescribed when traditional medicines are not suitable for the patient. Typically, a compounded prescription is only ordered if a patient is allergic to an ingredient in the generic form of the medicine. 

Filippone took advantage of his patients who had workers’ compensation insurance by telling them to have their prescriptions filled at Fair Lawn Pharmacy. As part of this scheme, Filippone sent forms and reports to the Department of Labor claiming his patients were disabled despite this not being the case. This was so that the Workers’ Compensation program would cover the expensive topical pain creams he prescribed patients. (One bottle of cream can cost thousands of dollars.)  

These compounded creams were filled at Fair Lawn Pharmacy, owned by Joseph Miller and Maelene Vangelas. Miller, Vangelas, and Zachary Ohebshalom allegedly instructed Fair Lawn employees to add the most expensive ingredient when creating pain creams for the postal service employees. This was so they could hike up the reimbursement payments they would receive. (These creams better be made of 24K gold for the prices he charged.)

It’s important to note that Fair Lawn Pharmacy was owned by the same company that owned and managed his office. Filippone directed more than $1.4 million in fraudulent prescriptions to Fair Lawn Pharmacy over the course of the scheme. Miller and Vangelas allegedly incentivized Filippone to keep sending patients to their pharmacy by allowing him to use the office without paying rent. (There is nothing fraudsters like more than making money and getting things for free.)

Ohebshalom pleaded guilty to his role in the workers compensation fraud scheme while charges against Miller and Vangelas are still pending. Filippone is set to be sentenced in March 2021. He faces up to five years in prison and a fine of either $250,000 or twice the gross gain or loss derived from the offense. Whichever cost is greater is the fine Filippone would be ordered to pay.

Today’s Fraud of the Day comes from an article, “Wallington doctor pleads guilty to prescription kickback scheme,” published by NorthJersey.com on October 29, 2020.

A doctor from Wallington admitted in federal court to prescribing expensive, unnecessary pain creams to hundreds of postal service employees for work-related injuries, then steering them to a Fair Lawn pharmacy owned by the same people who owned his office, authorities said Thursday.

Mark A. Filippone, 71, pleaded guilty by videoconference before U.S. District Judge Susan D. Wigenton to a charge of conspiring to violate the federal anti-kickback statute, according to a statement from U.S. Attorney Craig Carpenito.

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Larry Benson
Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.